Greetings, and welcome to the second quarter Helix Energy Solutions 2023 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session at that time. If you have a question, please press the one followed by the 4 on your telephone. If at any time during the conference, you need to reach an operator. As a reminder, this conference is being recorded Thursday, July 27, 2023, and I would now like to turn the conference over to Brent Arriaga, CAO of Helix Energy. Please go ahead.

Good morning, everyone, and thanks for joining us today on our conference call for our second quarter 2023 earnings release. Participating on this call today for Helix are Owen Kratz, our CEO; Scotty Sparks, our COO; Erik Staffeldt, our CFO; Ken Neikirk, our General Counsel; and myself. Hopefully, you've had an opportunity to review our earnings press release and the related slide presentation released last night. If you don't have a copy of these materials, both can be accessed through the investor page on our website at www.helixesg.com. The press release can be accessed under the Press Releases tab and the slide presentation can be accessed by clicking on today's webcast icon. Before we begin our prepared remarks, Ken Neikirk will make a statement regarding forward-looking information. Ken?

During this conference call, we anticipate making certain projections and forward-looking statements based on our expectations and assumptions as of today. Such forward-looking statements may include projections and estimates of future events, business or industry trends or business or financial results. All statements in this conference call or in the associated presentation, other than statements of historical fact, are forward-looking statements and are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Our actual future results may differ materially from our projections and forward-looking statements due to a number and variety of risks, uncertainties, assumptions and factors, including those set forth in Slide 2 and in our most recently filed annual report on Form 10-K, our quarterly reports on Form 10-Q and in our other filings with the SEC. You should not place undue reliance on forward-looking statements, and we do not undertake any duty to update any forward-looking statement. We disclaim any written or oral statements made by any third party regarding the subject matter of this conference call. Also, during this call, certain non-GAAP financial disclosures may be made. In accordance with SEC rules, the final slide of our presentation provides reconciliations of certain non-GAAP measures to comparable GAAP financial measures. These reconciliations, along with this presentation, the earnings press release, our annual report and a replay of this webcast are available under the For Investors section of our website at www.helixesg.com. Please remember that information on this conference call speaks only as of today, July 27, 2023, and therefore, you are advised that any time-sensitive information may no longer be accurate as of any replay of this call. Owen?

Good morning. Today, we'll go over our Q2 highlights and financial performance, along with insights into our operations, the main factors affecting our results, and our outlook for the rest of Q3. We will also discuss the ongoing development of the offshore energy market, our focus on opportunities within our energy transition model, and prospects beyond 2023. Starting with Slide 6, we’ll present a summary of our results and key highlights for the second quarter of 2023. Helix achieved strong results, partly due to improved weather conditions in the North Sea and the Gulf of Mexico. Even with economic uncertainties and fluctuating commodity markets, oil prices continue to support the current investment cycle. Moreover, the geographic expansion of the offshore renewables market into the U.S. and Asia Pacific regions has improved the rate environment for our services. Key highlights from the quarter include the Q7000 starting operations in New Zealand, strong well intervention activities in the North Sea and Brazil, and high utilization and operating results from Robotics, with significant trenching and vessel activity. Helix Alliance posted improved results through the activation of the Epichedran and ongoing execution of offshore Marine and Energy Services. The Q4000 was in dry dock for most of the quarter. We saw better cash generation and positive free cash flow. On the sales front, Helix Alliance secured a 39-well full field decommissioning contract in the Gulf of Mexico. Revenues for the quarter reached $309 million, up $59 million from the first quarter. We reported a net income of $7 million compared to a net loss of $5 million in the prior quarter. Adjusted EBITDA for Q2 more than doubled from the previous quarter to $71 million. During the quarter, we produced strong operating cash flow of $32 million, which included $24 million related to dry dock and recertification expenses. We invested $1 million in CapEx, resulting in $30 million of free cash flow for the quarter. Our results were significantly influenced by the regulatory certification and maintenance of the Q4000. Additionally, the Q7000 spent 55 days mobilizing to the Asia Pacific regions, with revenues and costs deferred until the project commenced in late May. Year-to-date revenues reached $559 million, an increase of $246 million compared to last year. We generated a net income of $2 million compared to a net loss of $72 million at this time in 2022. Adjusted EBITDA for the year has risen by $87 million to $106 million. For the year, our operating cash flow was $26 million compared to a negative $23 million in 2022. These results reflect significant year-over-year improvement. While the high number of regulatory maintenance days in 2023 has restrained our results, it has also created further opportunities for improvement in 2024. With our strong year-to-date results and a continuously improving outlook, we are raising our guidance for 2023. I want to thank our employees for their efforts during this strong start to 2023, as executing safe and efficient operations for our customers remains our hallmark. Our goal is to continue being a leading player in the offshore industry. Moving on to Slide 9, we are actively implementing our share repurchase program. In the second quarter, we repurchased 750,000 shares of our stock for around $5 million. As we carry on with the program, we'll balance the need to manage and fund our operations with our capital spending, including the Alliance term, existing debt, strategic investment opportunities, and the share repurchase program. I will now hand the call over to Scotty for a comprehensive discussion of our operations.

Thanks, Owen, and good morning, you come to Slide 11. Firstly, I would like to again thank our teams offshore and onshore for another very well-executed quarter, being our best-performing quarter for many years. There continues to be positive momentum in the global offshore markets that we operate in, and all of our businesses are well positioned for the remainder of 2023 and beyond. In the second quarter of 2023, we continue to operate globally with minimal operational disruption. Our operations in Europe, Asia, Brazil, the Gulf of Mexico and off the U.S. East Coast continue to uphold high standards with strong uptime efficiency. During the second quarter, we generated a gross profit of $55 million with a gross profit margin of 18%, up from a gross loss of $1 million in the second quarter of 2022. For the first 6 months of 2023, we generated a gross profit of $71 million, which indicates a significant improvement from a gross loss of $20 million during the first 6 months of 2022. We are expecting an even further improved second half of 2023 compared to the first half of the year, now that most of our larger planned regulatory maintenance periods are complete as the market continues to tighten, the demand for our services continues to grow. Slide 12 provides a review of our well intervention business in the Gulf of Mexico. The Q5000 had excellent utilization of 99% and the vessel performed very well conducting production enhancements and abandonment work on 5 wells in ultra-deepwater, working under a multiyear campaign for Shell. The Q4000 had a utilization of 7% in the second quarter completing a 2-well abandonment campaign for 1 client in ultra-deepwater and subsequently commenced the scheduled regulatory dry dock for the remainder of the quarter with completion scheduled for the end of July. Unfortunately, that dry dock has taken longer than originally scheduled since we undertook additional recertification work. Positively, we expect both vessels to have high utilization for the remainder of 2023. We've contracted awarded work well into Q4, and we already have awarded work in 2024. This gives us good visibility of potential further activity and increased rates compared to the first half of 2023. Both key vessels continue to operate under the integrated Helix FLB Subsea Service Alliance package. Moving to Slide 13. Our North Sea, well intervention business continues to respond well to the increased demand in the region, having a very strong second quarter, achieving 100% utilization for both vessels in the U.K. The enhancement performed very well on production enhancement works on 6 wells for 4 customers and then completed decommissioning operations on one well for another customer. The Seawell also had a very good quarter, working for three customers performing decommissioning works on numerous wells and production enhancement work for three wells. Demand for our services continues to improve, and our business is seeing much improved conditions in terms of rates, contracting terms and utilization. The Seawell is fully contracted for the remainder of the year and has recently contracted an expected 210-day decommissioning project in the Mediterranean, keeping the vessel contracted well into Q2 2024. The wire hand also has contracted work for the remainder of 2023 and has been awarded work in 2024 at further increased rates. On completion of its dry docking in Malaysia, the Q7000 completed paid transit in New Zealand and then commenced contracts in the second quarter. On completion of the works in New Zealand, the vessel is scheduled to carry out paid transit to Australia to undertake several decommissioning scopes for numerous clients in the second half of 2023 and into Q1 of 2024. The Q7000 is then contracted for 12 months with options to undertake well abandonment work with Shell in Brazil, including the paid transit to Brazil. The work is expected to commence at the end of Q1, early Q2 of 2024, and the Q7000 is now contracted well into 2025, and we have good visibility and work globally thereafter. Moving to Slide 14. In Brazil, we had good utilization of 97% in the second quarter. The rcm Helix was 94% utilized in Q2, undertaking work on a 2-year decommissioning project for Trident Energy, performing work on 5 wells in the quarter. The CMHLX-2 had a strong quarter with 100% utilization completing production enhancements and decommissioning activity on 2 wells with Petrobras. Both SH vessels are contracted to the end of 2024, and there is increased demand in tender activity in the SH vessels post-2024 globally, including in Brazil. With the Q7000 Shell contract, we are pleased to have 3 vessels contracted in the Brazil region in 2024. Slide 15 provides details of our loan prevention fleet utilization. And moving on to Slide 16 for our Robotics review. The Robotics continued their good performance and had another strong quarter, being the best performing quarter in terms of revenue and EBITDA since 2015. The business performed at high standards with strong utilization, operating 6 vessels globally during the quarter, primarily working between trenching, ROV support and site survey work on oil and gas and renewables-related projects. In the APAC region, the Grand Canyon II had 100% utilization in Q2. The vessel performed well on our long-term decommissioning project in Thailand. The newly acquired C1400 trenching system completed mobilization to Taiwan on board the same papers, a project-chartered vessel, we commenced work undertaken 65 days of trenching utilization in the quarter, performing well on a sizable estimated 200-day plus options renewable trenching project. In the North Sea, the Grand Canyon Free was utilized 89%, performing 2 renewable trenching projects for one customer. The Horizon noted it had 48 days of spot vessel utilization completing renewables trenching works for 2 customers and an oil and gas trenching project for other claims. Both trenching vessels in the North Sea have a strong backlog for the remainder of the 2023 trenching season with a mix of renewable and oil and gas trenching. Also in the North Sea, the Grama Wave completed 68 days of operations undertaking ordinance and renewable and site survey operations. In the U.S., the SutarBoard along the Jones x-combined vessel utilized 91% in Q2. The vessel performed work in the Gulf of Mexico to support a seismic node installation project that is expected to continue well into Q3 with options to extend. On the U.S. East Coast, we recently acquired a cloud trenching system completed 58 days of utilization working on the client-provided vessel undertaking site finance preparation on the renewable wind farm support project, again, expanding our services that we offer to the renewable sector. Helix robotics is performing very well and has a good backlog and visibility globally. We're expecting strong performance in 2023; we should have our best year since 2015. Our service and geographical expansion in the renewable sector continues, and the Robotics group completed work in 8 countries operating from 4 vessels in the renewable sector this quarter. Slide 17 details our robotics vessels already in trenching utilization. Slide 18 provides an overview of our shallow water decommissioning business, Helix Alliance had a very strong second quarter, producing the best performing quarter to date. The offshore division had 9 disputes operating in Q2 with an increased combined utilization of 88% performing decommissioning services. Offshore also supplied 6 OSVs and 1 crew boat with an increased combined utilization of 76%. The Energy Services division had increased operations of 1,250 days or 92% utilization for the 15 PMA systems deployed conducting decommissioning services. The division had increased operations of 304 days or 56% utilization for the 6 core achieving systems. In Q2, the Diving and Heavy Lift division season commenced with increased combined utilization of 53% across the free diving vessels with one of the vessels, the Patriot, undertaking planned regulatory dry dock maintenance for most of the quarter. The heavy lift parts of the heat run had increased utilization of 79%, undertaking platform removal and other decommissioning activities. In the second quarter, Helix Alliance was awarded the most sizable decommissioning contracts since the Helix acquisition. The contract is to decommission 39 wells, remove and dispose of 15 pipelines and dispose of 7 platform structures. The work recently commenced and is spread out over the next 12 months with an estimated value of $30 million to $40 million in each of 2023 and 2024. The contracts we utilize all services that Helix Alliance offers including some of the lift boats, multiple RSPs, PMA spreads, and one of the diver vessels in the heavy lift headroom. This contract highlights that Helix Alliance is the only contracting company that can offer full field shallow water abandonment. Slide 19 provides detail for the Helix Alliance Investment Systems recent utilization. Before I hand over to Brent, I would like to thank our global Helix employees and partners for producing strong results and a very good quarter, our best quarter in many years. The second half of 2023 is really shaping up well for Helix, and we expect a stronger second half of the year than the first half of this year. For the next few years, we expect to be in a strong position with high demand for our services across all sectors and regions we operate in, with improving rates and generally better terms and conditions. I'll now turn the call over to Brent.

Thanks, Scotty. Moving to Slide 21, it outlines our debt instruments and maturity profile as of June 30. We had total funded debt of $267 million at quarter end. Our maturing maturities in 2023 include a $4 million installment of Marat debt in August and our 2023 converts, which matured in September and have a remaining principal of $30 million. We have long communicated our intention to cash settle those notes using cash on hand. Moving on to Slide 22, it provides an update on key balance sheet metrics, including cash, long-term debt, liquidity and net debt levels. With cash of $183 million, our net debt position at quarter end was $78 million. During the second quarter, we increased the size of our ABL facility from $100 million to $120 million. At quarter end, we had $112 million of gross capacity under ABL and no borrowings outstanding. After considering LCs, our net remaining availability under the ABL was $103 million with resulting liquidity of $285 million. I'll now turn the call over to Erik for a discussion on our outlook for 2023 and beyond.

Thanks, Brent. As we've discussed, we've had a solid start to 2023. And the offshore market, traditional oil and gas and renewables continues to show its strength. We are increasing our guidance for '23 as follows: revenue, $1.175 to $1.25 billion, EBITDA $240 million to $270 million, a $25 million increase from midpoint. Free cash flow, $130 million to $170 million, a $20 million increase from midpoint, and our CapEx in the $65 million to $80 million range. These ranges include some key assumptions and estimates, and any significant variation from these key assumptions and estimates could cause our results to fall outside the ranges provided. Our quarterly results are likely to continue to be impacted by seasonal weather in the North Sea and Gulf of Mexico shelf, primarily in the fourth quarter and first quarter. In addition, the timing of our vessel maintenance periods and project mobilizations will cause variances between quarters. For instance, the impact of the Q4000 dry dock extension which has resulted in fewer days available at the launch in Q3. We nevertheless expect the second half of 2023 to be stronger than the first half with the third quarter likely being our stronger quarter. Providing key assumptions by segments and regions starting on Slide 25. First, our well intervention segment. The Gulf of Mexico is expected to continue to be a strong market in '23 with improving rates and expected strong utilization on the Q4000 and Q5000. The Q4000 is currently expected to complete its stocking and be on hire by the end of July. In the U.K. North Sea, both vessels have contracted work through Q4 and with the Seawell having work into Q2 of 2024. Activity levels for our well intervention vessels in this market continue to be robust. During the second half of this year, the Seawell is scheduled to undertake a 2-to-3-week transit for a project in the Mediterranean. The Q7000 is currently operating in New Zealand on the Tui project; the vessel has contracted work in the APAC region expected into Q1 of 2024. In Brazil, the CMTX is contracted into mid-December 2024 with Petrobras. And the smHelix is performing well abandonment work for Trident into Q4 of 2024. Moving to our Robotics segment on Slide 26. The robotic segment continues to benefit from a tight market where currently both oil and gas market and renewable market are extremely active competing for our assets and services. In the APAC region, the Grand Canyon II is contracted to perform decommissioning and ROV support work in Thailand into Q3 with expected good utilization for the balance of 2023 in that region. In addition, we'll have the recently acquired T100 trenchers contracted and working into Q4. In the North Sea, the Grand Canyon II is contracted to perform trenching work with expected strong utilization for 2023. The Horizon enabler with its flexible charter has trenching projects into Q4. The Globe a wave is forecasted to have good utilization in site clearance and HLX removal during the remainder of the year. In the U.S., the Celia bar line is working in the Gulf of Mexico performing ROV operations with opportunities in the Gulf of Mexico and the U.S. East Coast; the vessel is expected to have strong realization for 2023. For production facilities, the HP1 is on contract for balance of 2023 with no expected change; we do have expected variability with production as the Droshky fuel continues to deplete. Continuing on to Slide 27 for our shallow water Benet segment, the shelf decommissioning market continues to be very active. For 2023, we expect the Marine Offshore division to maintain good utilization on 8 to 9 lift boats with some variable seasonality on the OSVs and crude boats. The Energy Services division should have strong relations for 12 to 15 P&A spreads and 1 to 3 coiled tubing units during 2023. During seasonality in the Diving and Heavy Lift division, where the Hedrin is Mobileye, both are expected to end in late Q3. Moving on to Slide 28. Our CapEx forecast for 2023 is heavily impacted by the dry docks and maintenance periods on our key vessels. The Q7000 and Q5000 completed their maintenance periods and the Q4000 is scheduled to complete its TRADOC in late July. We did undertake additional recertification work on the Q4000, which resulted in additional days in the yard and increased capital spend. With a heavy regulatory year and the inclusion of Helix Alliance, our CapEx range for 2023 is now $65 million to $80 million. Our cash spend in Q2 was approximately $25 million, the majority of our CapEx continues to be maintenance and project-related, which primarily falls into our operating cash flows. Reviewing our balance sheet, our funded debt of $267 million at June 30 is expected to decrease by $34 million during the balance of 2023 with scheduled principal payments, primarily the maturity of the $30 million remaining on the 2023 converts. I'll skip the remaining slides and leave them for your reference. At this time, I'll turn the call back to Owen for further discussion on our outlook and for closing remarks.

Thanks, Erik. Last quarter, we indicated that we thought we were trending towards the upper end of our initial guidance, and things have continued to improve. In fact, we're exceeding our forecast despite a few anomalies. In Q2, we more than doubled our Q1 EBITDA and our forecast for the rest of the 2023 remains strong. We've raised the lower end of our EBITDA guidance by $30 million and raised the upper end by $20 million, as Erik mentioned. This is a testament not only to a robust offshore service market, but the diversification we've built into our business and operational execution by our people. 2023 has started well and as strong as our current performance is, there are identifiable opportunities for even further improvement going forward, especially for 2024. First, five of our well intervention vessels, the Q4000, Q5000, well enhanced and Seawell all have planned maintenance or dockings this year. As you've already heard, the most significant unexpected issue in Q2 occurred with the regulatory required dry dock of the Q4000, which resulted in unanticipated recertification work and significant additional maintenance CapEx expense. Earlier this year, we experienced a number of delays on the Q7000 as a result of weather and shipyard performance negatively impacting the Q7000 potential returns. None of these events should recur in 2024. We should have approximately 200 incremental vessel days to sell in 2024 in our well intervention segment, just based on fewer scheduled maintenance days. Using our 2023 rates and costs, the potential benefit in 2024 could be up to $25 million to $30 million from these extra days. In addition, the offshore service market continues to improve with supply constraints for assets and services leading to higher rates and greater visibility. The rates are continuing to improve in many regions, although they are partially offset by higher labor costs. There are contractual rate increases already on the Q7000 S2 and S1 for 2024, with further contract extensions with rate improvements under discussions for these vessels. We continue to work through legacy rates on work contracted at a weaker point in the market prior to 2023, creating further future upside for the current higher rate environment. Of the three trenchers and two intervention systems recently acquired, one of each is currently working on long-term commitments. So far, the forecasted returns are better than originally expected, meaning the other two systems could bring additional upside. Shallow water abandonment has just begun to see the potential for the demand increases. Rates have only started to improve in this space and are expected to escalate going forward, somewhat offset by higher labor costs. But the outlook for decommissioning demand appears to be strong for years to come. We're well positioned in the transitional segments in the oil and gas markets. Our businesses are poised for long sustained demand as the energy market transitions. While many contractors have struggled to maintain suitable returns in the offshore wind markets, the Helix approach of providing specialty services is generating satisfactory returns with an outlook for not only sustainability but growth as well. The three buckets of our business model—maximizing existing reserves, decommissioning and renewable support—remains our foundation, and each one shows promise for sustainable growth. We always explore opportunities that prioritize shareholder return with our current focus being on growth within our existing capabilities. We believe we're being patient and selective with these opportunities and our markets continue to be dynamic. We expect to generate double-digit free cash flow yield going forward. We will be paying attention to our capital structure and debt as well as capital allocation to building cash, share repurchase and growth in a balanced manner to yield what we believe will represent the greatest return to shareholders. And with that, I'll turn it back to you.

Operator, at this time, we'll take any questions.

Our first question is coming from the line of Greg Lewis.

I wanted to begin by discussing well intervention. It appears that the market is shifting in your favor regarding pricing. I'm curious if customers are recognizing that visibility looks promising for the next six months or more. However, if they start to consider contracting vessels further out, similar to what we are seeing in the rig market, it seems customers are beginning to look for equipment as early as 2025. How are the conversations with customers regarding your core assets going?

It's Scotty here. I'll take that. Yes, we are seeing future outlook. Down in Brazil, we're seeing clients looking out the vessels to 2025. We're in discussions with Petrobras and others to extend the two SH vessels down there. Shell has taken the Q7000 into 2025, and they have options that could take it all the way up to 2026. In the North Sea, we've got a better outlook than we've had in many, many years, probably going back to 2014. We have more booked years right now going into 2024 than we've had in quite a long time. So we're definitely seeing that the clients take a forward look on this. We've got long-term agreements that have been set up in the Gulf of Mexico recently with the likes of Oxy, Shell, and Hess. So, these clients are looking out towards the future and providing us with a better backdrop than we've had in a while.

I'll just add a little bit to that. I think if you go back to 2022, there was starting to be a demand for clients looking out multiple years. There was a reluctance on our part because we were still in the downturn. And therefore, we were providing what we consider now legacy rates which are well below current market rates. So we were reluctant to get pricing out. A dynamic in the market right now, though, is that I think the clients have come around to realizing that for multiyear contracts, there has to be escalators. So we're being more successful in building escalators into our contracts. That gives us a little more confidence in starting discussions about booking additional multiyear contracts going into the future. So, I think the clients are sort of pivoting towards being concerned more about availability than achieving the lowest rate possible.

Yes, absolutely. And then I want to I guess in hindsight, congratulations on Alliance. I mean, just as we think about what is happening in that abandonment business, it's been impressive. I guess, I think a lot of people are wondering—was this kind of just some pent-up demand? Or as we think about it, and I'm not asking for multiyear guidance, but as you see certain things in this market over the next couple of years, is there any reason why we can't at least hold what we've been able to do more recently in that space? I mean, it's just been like I said, I mean, give us a little color on what's happening there? And I guess I have to assume that the acquisition of Alliance really has exceeded your expectations at least to this point.

I believe we've reached a significant turning point in the marketplace. For years, the decommissioning of shallow water structures was something we expected would happen but never did. The industry's approach was to sell these structures to smaller producers and defer the decommissioning work. This strategy has led to several major bankruptcies in recent years as production cash flows were drained from the companies, forcing these properties back onto the market. What's different now is that many of these properties have a negative asset value. The industry is learning that selling to smaller producers is not a viable option anymore because the abandonment issues will resurface aggressively. We anticipated this situation, which is why we acquired Helix Alliance. We are just beginning to see an increase in decommissioning demand following the recent bankruptcy of Cox, leading to an unusual surge in demand for decommissioning in shallower waters. This time, there won't be an option to defer demand by selling, so the necessary work is finally going to be executed, and we are beginning to see this reflected in our results with Alliance.

I think also you have to remember with Alliance, we are the only company that can do full shallow water, full field or decommissioning and the recent award that we've just had of the 39 wells, 15 pipelines and seven structures to remove shows that we have all the capabilities to package big decommissioning contracts together.

Yes. And that's been pretty exciting to watch. Anyway, hey, thanks for taking my question and have a great day.

Our next question is coming from the line of James Schumm.

So, you have some long-term contracts on some well intervention vessels in at least the Gulf of Mexico and Brazil how much, if at all, the rates typically move up in this scenario? I'm just trying to get a sense of what 2024 might look like for these longer-term contracts.

So, we do have some legacy left over in 2024, especially down in Brazil. We're discussing with those clients for extensions past 2024. And I think it's fair to say that we will be increasing the rates on those contracts. Some of the legacy contracts we've just been placed are in the new longer-term contracts we've just been in place in the Gulf of Mexico at far better rates than the legacy rates we've had in the past. So, we've recently contracted two longer-term three-year outlook contracts with majors in the Gulf, and the far better rates than the legacy teams we've had in the past. And I think Owen pointed out what the increases in the space can be for next year just on utilization days as well.

Just to expand on that, on the Q7000, we do have a multiyear contract through 2025 on that vessel. It does have escalators already built into the contract. So we do have built-in visibility on improvement there. Same with the SH1 going forward. And then as we mentioned in our presentation, we're also in discussions about extending both of those vessels along with the SH2 with Petrobras for multiyear beyond what we already have currently contracted, and all of that would also have escalators built into it. The two vessels in the North Sea are very high in demand right now, and we are booking partial utilization contracts on a multiyear basis. For instance, we already have 300 days of work already contracted in the North Sea with some pretty meaningful rate increases over 2023. So, we already have at this time last year, we gave you about four or five things that we knew we were going to have. Maybe a little early for us to quantify all of this. We have to work through it, but there are a number of positive things that are already contracted. We have visibility on that and have built-in improvement from 2024 over 2023.

Okay. And then just sort of wanted to ask what's driving the strength in robotics? I mean, is there anything in particular; were there any onetime unusual items here, closeouts, or high-margin mix, and if you could just comment on where rates are versus last year?

Okay. So, I'll take that. So, robotics obviously has had a very good performance this year with big improvements. A lot of this has been driven by the renewable sector and our build-out into the trenching market. We've had a couple of onetime items this year, with a couple of lumps, some transient jobs that have gone in our favor and performed very well. But obviously, you've seen the expansion into Taiwan, where we've bought some new trenchers and we've put them to work in both the Taiwan market. We're seeing an expansion in renewables work, not just transient, but other services on a global basis. We've gone from trenching that was primarily a U.K.-based business. It's now in Taiwan. There's talk of careers that we've been trending on the U.S. East Coast. So, I see that continuing and expanding, and our rates are up, say, 10% to 15% year-over-year.

Okay. Great. And then if I could just squeeze one more in. The Epic Hedrin, like how do we think about that? Is that similar to a well intervention vessel in terms of day rates and OpEx or similar to a rig or any there would be great.

No. The Hedrin is a shelf heavy lift asset. So it bears no resemblance to rigs or the other vessels. I think the margins that it can achieve must be understood in the context of the heavy lift market. The heavy lift market is a seasonal market. It can only safely operate during the more benign summer months. So, there's seasonality. There are probably discounts or exposure to be taken if you wanted to work in the wintertime. But typically, it's going to be lower utilization, and also then you have to realize that as this abandonment work comes to fruition, and we're talking about well over 1,000 structures that need to be removed. And there are only eight remaining heavy lift assets in the Gulf of Mexico. So, they're all going to be very busy. But the time is coming. In decommissioning the field, you focus first on making the platform safe, flushing it, and then doing all of your well plug and abandonment and your pipeline. The very last thing is the platform removal. So, while you're seeing a lot of activity on wells and platform make-safe work right now, the heavy lifting portion is still yet to come. We've just seen the first real increase in utilization for the Hedrin as it went to work this year. I think you'll see the rates and utilization for that asset improve going forward.

But Owen, I just want to make sure I got that correctly. I'm just asking about the economics. Is that similar to well intervention, or is that below or above? And I know there's some seasonality, which is going to change that, but in general?

So, it is below well intervention rates. It's more in line with a high-end construction vessel. One of our high-end trenching systems has similar rates that we would obtain for that vessel.

Our next question is coming from the line of David Smith. Please go ahead.

Hey, good morning. Congratulations on a solid quarter.

Thank you.

I want to circle back to that big decommissioning contract you announced. And if I heard your comments correctly, revenue from that contract is expected to be $30 million to $40 million in each of 2023 and 2024. So at the midpoint, about $70 million over 12 months, which is almost 30% of your drilling fourth-quarter revenue in that segment.

Sorry. You have to remember it's spread out over 12 months. There will be certain parts that we can't do for the winter months like the heavy lift. So that might be towards the end of the first quarter of next year. So, it is spread out but $30 million to $40 million each year is good guidance on it.

Perfect. So, I'm used to thinking about the plug and abandonment market being relatively short-term in nature. I would love any color that you could share about the project. If this is an operator taking a more holistic approach than they previously did. And I'm curious if you're seeing operators getting nervous at all about availability to execute their P&A plan. So maybe they're contracting for a larger program instead of playing the spot market.

Yes. The focus right now is on all the wells and structures. But you've got to understand that there are in excess of 5,000 wells out there to do. There's far more work than our entire industry right now could get done in the next 5 to 7 years. So, what that means is that the producers since the awareness of wanting to get this work done now is just occurring all at the same time. There's a real concern by the producers on availability. So I think the fact that we own anywhere from 25% to 50%, depending on which asset class you're talking about, of all the assets available, and we're the only ones that actually have all of the asset classes we require to do the work I think is garnering a lot of attention from the producers that are a little concerned about getting in the queue and having availability to get their work done, so it's all very positive for us.

I think this producer that gave us that contract realized that we could provide all of the assets, and they only have to come to one shop to get everything done, so they didn't have to manage in a typical environment different contractors and making sure those schedules come together at all; they just have to come to us, and we project manage the whole thing for them with all the different assets that we have.

Yes. I appreciate all that color. And if I could in a quick follow-up question on that Alliance. I'm curious if you see other opportunities out there to maybe add to your shallow water abandonment fleet?

There are opportunities to buy more equipment. The bottleneck in the industry is going to be people. I think our approach to that is that we would like to remain, I think on the shelf you have a degradation in the quality of the contractors over the past decades of slow work on the shelf. One thing that Helix brings to it is the quality of our processes, SOPs and standards. So we're going to be a little reluctant to just go out and buy more equipment and then just look for bodies. We're going to be a little more cautious in adding quality people, and we'll add that as we find the people.

Great. Appreciate your time today. Thank you.

We have no further questions. Owen Kratz, thanks for joining us today. We very much appreciate your interest and participation and look forward to having you on our third quarter 2023 call in October. Thank you.